Shorting Gold – August 1st 2022

Today, I decided to short gold in a recession. Widely repeated advice is to invest in Gold during a recession, as it sometimes has outperformed the S&P in declining markets. I disagree with that correlation, and can point to recent recessions as examples.

There is simply not the investment demand for Gold that existed earlier in the 20th century.

Justification for my trade Today

We’re below the longer term range Value Area Low (VAL).

We rejected from this Daily Fair Value Gap (FVG). We also had a bearish 4HR Order Block (-OB).

Larger macro Perspective

Overall, I see equities going lower in the coming months. I foresee people going to cash, rather than commodities like Gold.